TH D CONGRESS SESSION H. R. 6757 · HR 6757 RFS 1 thereof), whichever is applicable, merely because...

IIB

115TH CONGRESS 2D SESSION H. R. 6757

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 28, 2018

Received; read twice and referred to the Committee on Finance

AN ACT To amend the Internal Revenue Code of 1986 to encourage

retirement and family savings, and for other purposes.

Be it enacted by the Senate and House of Representa-1

tives of the United States of America in Congress assembled, 2

VerDate Sep 11 2014 01:22 Sep 29, 2018 Jkt 079200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6757.RFS H6757SS

penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

2

HR 6757 RFS

SECTION 1. SHORT TITLE; ETC. 1

(a) SHORT TITLE.—This Act may be cited as the 2

‘‘Family Savings Act of 2018’’. 3

(b) TABLE OF CONTENTS.—The table of contents for 4

this Act is as follows: 5

Sec. 1. Short title; etc.

TITLE I—EXPANDING AND PRESERVING RETIREMENT SAVINGS

Sec. 101. Multiple employer plans; pooled employer plans.

Sec. 102. Rules relating to election of safe harbor 401(k) status.

Sec. 103. Certain taxable non-tuition fellowship and stipend payments treated

as compensation for IRA purposes.

Sec. 104. Repeal of maximum age for traditional IRA contributions.

Sec. 105. Qualified employer plans prohibited from making loans through credit

cards and other similar arrangements.

Sec. 106. Portability of lifetime income investments.

Sec. 107. Treatment of custodial accounts on termination of section 403(b)

plans.

Sec. 108. Clarification of retirement income account rules relating to church-

controlled organizations.

Sec. 109. Exemption from required minimum distribution rules for individuals

with certain account balances.

Sec. 110. Clarification of treatment of certain retirement plan contributions

picked up by governmental employers for new or existing em-

ployees.

Sec. 111. Elective deferrals by members of the Ready Reserve of a reserve com-

ponent of the Armed Forces.

TITLE II—ADMINISTRATIVE IMPROVEMENTS

Sec. 201. Plan adopted by filing due date for year may be treated as in effect

as of close of year.

Sec. 202. Modification of nondiscrimination rules to protect older, longer serv-

ice participants.

Sec. 203. Fiduciary safe harbor for selection of lifetime income provider.

TITLE III—OTHER SAVINGS PROVISIONS

Sec. 301. Universal Savings Accounts.

Sec. 302. Expansion of section 529 plans.

Sec. 303. Penalty-free withdrawals from retirement plans for individuals in case

of birth of child or adoption.

TITLE IV—BUDGETARY EFFECTS

Sec. 401. Budgetary effects.


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

3

HR 6757 RFS

TITLE I—EXPANDING AND PRE-1

SERVING RETIREMENT SAV-2

INGS 3

SEC. 101. MULTIPLE EMPLOYER PLANS; POOLED EM-4

PLOYER PLANS. 5

(a) QUALIFICATION REQUIREMENTS.— 6

(1) IN GENERAL.—Section 413 of the Internal 7

Revenue Code of 1986 is amended by adding at the 8

end the following new subsection: 9

‘‘(e) APPLICATION OF QUALIFICATION REQUIRE-10

MENTS FOR CERTAIN MULTIPLE EMPLOYER PLANS WITH 11

POOLED PLAN PROVIDERS.— 12

‘‘(1) IN GENERAL.—Except as provided in para-13

graph (2), if a defined contribution plan to which 14

subsection (c) applies— 15

‘‘(A) is maintained by employers which 16

have a common interest other than having 17

adopted the plan, or 18

‘‘(B) in the case of a plan not described in 19

subparagraph (A), has a pooled plan provider, 20

then the plan shall not be treated as failing to meet 21

the requirements under this title applicable to a plan 22

described in section 401(a) or to a plan that consists 23

of individual retirement accounts described in sec-24

tion 408 (including by reason of subsection (c) 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

4

HR 6757 RFS

thereof), whichever is applicable, merely because one 1

or more employers of employees covered by the plan 2

fail to take such actions as are required of such em-3

ployers for the plan to meet such requirements. 4

‘‘(2) LIMITATIONS.— 5

‘‘(A) IN GENERAL.—Paragraph (1) shall 6

not apply to any plan unless the terms of the 7

plan provide that in the case of any employer 8

in the plan failing to take the actions described 9

in paragraph (1)— 10

‘‘(i) the assets of the plan attributable 11

to employees of such employer (or bene-12

ficiaries of such employees) will be trans-13

ferred to a plan maintained only by such 14

employer (or its successor), to an eligible 15

retirement plan as defined in section 16

402(c)(8)(B) for each individual whose ac-17

count is transferred, or to any other ar-18

rangement that the Secretary determines is 19

appropriate, unless the Secretary deter-20

mines it is in the best interests of the em-21

ployees of such employer (and the bene-22

ficiaries of such employees) to retain the 23

assets in the plan, and 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

5

HR 6757 RFS

‘‘(ii) such employer (and not the plan 1

with respect to which the failure occurred 2

or any other employer in such plan) shall, 3

except to the extent provided by the Sec-4

retary, be liable for any liabilities with re-5

spect to such plan attributable to employ-6

ees of such employer (or beneficiaries of 7

such employees). 8

‘‘(B) FAILURES BY POOLED PLAN PRO-9

VIDERS.—If the pooled plan provider of a plan 10

described in paragraph (1)(B) does not perform 11

substantially all of the administrative duties 12

which are required of the provider under para-13

graph (3)(A)(i) for any plan year, the Secretary 14

may provide that the determination as to 15

whether the plan meets the requirements under 16

this title applicable to a plan described in sec-17

tion 401(a) or to a plan that consists of indi-18

vidual retirement accounts described in section 19

408 (including by reason of subsection (c) 20

thereof), whichever is applicable, shall be made 21

in the same manner as would be made without 22

regard to paragraph (1). 23

‘‘(3) POOLED PLAN PROVIDER.— 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

6

HR 6757 RFS

‘‘(A) IN GENERAL.—For purposes of this 1

subsection, the term ‘pooled plan provider’ 2

means, with respect to any plan, a person 3

who— 4

‘‘(i) is designated by the terms of the 5

plan as a named fiduciary (within the 6

meaning of section 402(a)(2) of the Em-7

ployee Retirement Income Security Act of 8

1974), as the plan administrator, and as 9

the person responsible to perform all ad-10

ministrative duties (including conducting 11

proper testing with respect to the plan and 12

the employees of each employer in the 13

plan) which are reasonably necessary to 14

ensure that— 15

‘‘(I) the plan meets any require-16

ment applicable under the Employee 17

Retirement Income Security Act of 18

1974 or this title to a plan described 19

in section 401(a) or to a plan that 20

consists of individual retirement ac-21

counts described in section 408 (in-22

cluding by reason of subsection (c) 23

thereof), whichever is applicable, and 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

7

HR 6757 RFS

‘‘(II) each employer in the plan 1

takes such actions as the Secretary or 2

such person determines are necessary 3

for the plan to meet the requirements 4

described in subclause (I), including 5

providing to such person any disclo-6

sures or other information which the 7

Secretary may require or which such 8

person otherwise determines are nec-9

essary to administer the plan or to 10

allow the plan to meet such require-11

ments, 12

‘‘(ii) registers as a pooled plan pro-13

vider with the Secretary, and provides such 14

other information to the Secretary as the 15

Secretary may require, before beginning 16

operations as a pooled plan provider, 17

‘‘(iii) acknowledges in writing that 18

such person is a named fiduciary (within 19

the meaning of section 402(a)(2) of the 20

Employee Retirement Income Security Act 21

of 1974), and the plan administrator, with 22

respect to the plan, and 23

‘‘(iv) is responsible for ensuring that 24

all persons who handle assets of, or who 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

8

HR 6757 RFS

are fiduciaries of, the plan are bonded in 1

accordance with section 412 of the Em-2

ployee Retirement Income Security Act of 3

1974. 4

‘‘(B) AUDITS, EXAMINATIONS AND INVES-5

TIGATIONS.—The Secretary may perform au-6

dits, examinations, and investigations of pooled 7

plan providers as may be necessary to enforce 8

and carry out the purposes of this subsection. 9

‘‘(C) AGGREGATION RULES.—For purposes 10

of this paragraph, in determining whether a 11

person meets the requirements of this para-12

graph to be a pooled plan provider with respect 13

to any plan, all persons who perform services 14

for the plan and who are treated as a single 15

employer under subsection (b), (c), (m), or (o) 16

of section 414 shall be treated as one person. 17

‘‘(D) TREATMENT OF EMPLOYERS AS PLAN 18

SPONSORS.—Except with respect to the admin-19

istrative duties of the pooled plan provider de-20

scribed in subparagraph (A)(i), each employer 21

in a plan which has a pooled plan provider shall 22

be treated as the plan sponsor with respect to 23

the portion of the plan attributable to employ-24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

9

HR 6757 RFS

ees of such employer (or beneficiaries of such 1

employees). 2

‘‘(4) GUIDANCE.—The Secretary shall issue 3

such guidance as the Secretary determines appro-4

priate to carry out this subsection, including guid-5

ance— 6

‘‘(A) to identify the administrative duties 7

and other actions required to be performed by 8

a pooled plan provider under this subsection, 9

‘‘(B) which describes the procedures to be 10

taken to terminate a plan which fails to meet 11

the requirements to be a plan described in para-12

graph (1), including the proper treatment of, 13

and actions needed to be taken by, any em-14

ployer in the plan and the assets and liabilities 15

of the plan attributable to employees of such 16

employer (or beneficiaries of such employees), 17

and 18

‘‘(C) identifying appropriate cases to which 19

the rules of paragraph (2)(A) will apply to em-20

ployers in the plan failing to take the actions 21

described in paragraph (1). 22

The Secretary shall take into account under sub-23

paragraph (C) whether the failure of an employer or 24

pooled plan provider to provide any disclosures or 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

10

HR 6757 RFS

other information, or to take any other action, nec-1

essary to administer a plan or to allow a plan to 2

meet requirements applicable to the plan under sec-3

tion 401(a) or 408, whichever is applicable, has con-4

tinued over a period of time that demonstrates a 5

lack of commitment to compliance. 6

‘‘(5) MODEL PLAN.—The Secretary shall pub-7

lish model plan language which meets the require-8

ments of this subsection and of paragraphs (43) and 9

(44) of section 3 of the Employee Retirement In-10

come Security Act of 1974 and which may be adopt-11

ed in order for a plan to be treated as a plan de-12

scribed in paragraph (1)(B).’’. 13

(2) CONFORMING AMENDMENT.—Section 14

413(c)(2) of such Code is amended by striking ‘‘sec-15

tion 401(a)’’ and inserting ‘‘sections 401(a) and 16

408(c)’’. 17

(3) TECHNICAL AMENDMENT.—Section 408(c) 18

of such Code is amended by inserting after para-19

graph (2) the following new paragraph: 20

‘‘(3) There is a separate accounting for any in-21

terest of an employee or member (or spouse of an 22

employee or member) in a Roth IRA.’’. 23

(b) NO COMMON INTEREST REQUIRED FOR POOLED 24

EMPLOYER PLANS.—Section 3(2) of the Employee Retire-25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

11

HR 6757 RFS

ment Income Security Act of 1974 (29 U.S.C. 1002(2)) 1

is amended by adding at the end the following: 2

‘‘(C) A pooled employer plan shall be treat-3

ed as— 4

‘‘(i) a single employee pension benefit 5

plan or single pension plan; and 6

‘‘(ii) a plan to which section 210(a) 7

applies.’’. 8

(c) POOLED EMPLOYER PLAN AND PROVIDER DE-9

FINED.— 10

(1) IN GENERAL.—Section 3 of the Employee 11

Retirement Income Security Act of 1974 (29 U.S.C. 12

1002) is amended by adding at the end the fol-13

lowing: 14

‘‘(43) POOLED EMPLOYER PLAN.— 15

‘‘(A) IN GENERAL.—The term ‘pooled em-16

ployer plan’ means a plan— 17

‘‘(i) which is an individual account 18

plan established or maintained for the pur-19

pose of providing benefits to the employees 20

of 2 or more employers; 21

‘‘(ii) which is a plan described in sec-22

tion 401(a) of the Internal Revenue Code 23

of 1986 which includes a trust exempt 24

from tax under section 501(a) of such 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

12

HR 6757 RFS

Code or a plan that consists of individual 1

retirement accounts described in section 2

408 of such Code (including by reason of 3

subsection (c) thereof); and 4

‘‘(iii) the terms of which meet the re-5

quirements of subparagraph (B). 6

Such term shall not include a plan maintained 7

by employers which have a common interest 8

other than having adopted the plan. 9

‘‘(B) REQUIREMENTS FOR PLAN TERMS.— 10

The requirements of this subparagraph are met 11

with respect to any plan if the terms of the 12

plan— 13

‘‘(i) designate a pooled plan provider 14

and provide that the pooled plan provider 15

is a named fiduciary of the plan; 16

‘‘(ii) designate one or more trustees 17

meeting the requirements of section 18

408(a)(2) of the Internal Revenue Code of 19

1986 (other than an employer in the plan) 20

to be responsible for collecting contribu-21

tions to, and holding the assets of, the 22

plan and require such trustees to imple-23

ment written contribution collection proce-24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

13

HR 6757 RFS

dures that are reasonable, diligent, and 1

systematic; 2

‘‘(iii) provide that each employer in 3

the plan retains fiduciary responsibility 4

for— 5

‘‘(I) the selection and monitoring 6

in accordance with section 404(a) of 7

the person designated as the pooled 8

plan provider and any other person 9

who, in addition to the pooled plan 10

provider, is designated as a named fi-11

duciary of the plan; and 12

‘‘(II) to the extent not otherwise 13

delegated to another fiduciary by the 14

pooled plan provider and subject to 15

the provisions of section 404(c), the 16

investment and management of the 17

portion of the plan’s assets attrib-18

utable to the employees of the em-19

ployer (or beneficiaries of such em-20

ployees); 21

‘‘(iv) provide that employers in the 22

plan, and participants and beneficiaries, 23

are not subject to unreasonable restric-24

tions, fees, or penalties with regard to 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

14

HR 6757 RFS

ceasing participation, receipt of distribu-1

tions, or otherwise transferring assets of 2

the plan in accordance with section 208 or 3

paragraph (44)(C)(i)(II); 4

‘‘(v) require— 5

‘‘(I) the pooled plan provider to 6

provide to employers in the plan any 7

disclosures or other information which 8

the Secretary may require, including 9

any disclosures or other information 10

to facilitate the selection or any moni-11

toring of the pooled plan provider by 12

employers in the plan; and 13


to take such actions as the Secretary 15

or the pooled plan provider determines 16

are necessary to administer the plan 17

or for the plan to meet any require-18

ment applicable under this Act or the 19

Internal Revenue Code of 1986 to a 20

plan described in section 401(a) of 21

such Code or to a plan that consists 22

of individual retirement accounts de-23

scribed in section 408 of such Code 24

(including by reason of subsection (c) 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

15

HR 6757 RFS

thereof), whichever is applicable, in-1

cluding providing any disclosures or 2

other information which the Secretary 3

may require or which the pooled plan 4

provider otherwise determines are nec-5

essary to administer the plan or to 6

allow the plan to meet such require-7

ments; and 8

‘‘(vi) provide that any disclosure or 9

other information required to be provided 10

under clause (v) may be provided in elec-11

tronic form and will be designed to ensure 12

only reasonable costs are imposed on 13

pooled plan providers and employers in the 14

plan. 15

‘‘(C) EXCEPTIONS.—The term ‘pooled em-16

ployer plan’ does not include— 17

‘‘(i) a multiemployer plan; or 18

‘‘(ii) a plan established before the 19

date of the enactment of the Family Sav-20

ings Act of 2018 unless the plan adminis-21

trator elects that the plan will be treated 22

as a pooled employer plan and the plan 23

meets the requirements of this title appli-24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

16

HR 6757 RFS

cable to a pooled employer plan established 1

on or after such date. 2

‘‘(D) TREATMENT OF EMPLOYERS AS PLAN 3

SPONSORS.—Except with respect to the admin-4

istrative duties of the pooled plan provider de-5

scribed in paragraph (44)(A)(i), each employer 6

in a pooled employer plan shall be treated as 7

the plan sponsor with respect to the portion of 8

the plan attributable to employees of such em-9

ployer (or beneficiaries of such employees). 10

‘‘(44) POOLED PLAN PROVIDER.— 11

‘‘(A) IN GENERAL.—The term ‘pooled plan 12

provider’ means a person who— 13

‘‘(i) is designated by the terms of a 14

pooled employer plan as a named fiduciary, 15

as the plan administrator, and as the per-16

son responsible for the performance of all 17

administrative duties (including conducting 18

proper testing with respect to the plan and 19

the employees of each employer in the 20

plan) which are reasonably necessary to 21

ensure that— 22

‘‘(I) the plan meets any require-23

ment applicable under this Act or the 24

Internal Revenue Code of 1986 to a 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

17

HR 6757 RFS

plan described in section 401(a) of 1

such Code or to a plan that consists 2

of individual retirement accounts de-3

scribed in section 408 of such Code 4

(including by reason of subsection (c) 5

thereof), whichever is applicable; and 6


takes such actions as the Secretary or 8

pooled plan provider determines are 9

necessary for the plan to meet the re-10

quirements described in subclause (I), 11

including providing the disclosures 12

and information described in para-13

graph (43)(B)(v)(II); 14

‘‘(ii) registers as a pooled plan pro-15

vider with the Secretary, and provides to 16

the Secretary such other information as 17

the Secretary may require, before begin-18

ning operations as a pooled plan provider; 19

‘‘(iii) acknowledges in writing that 20

such person is a named fiduciary, and the 21

plan administrator, with respect to the 22

pooled employer plan; and 23

‘‘(iv) is responsible for ensuring that 24

all persons who handle assets of, or who 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

18

HR 6757 RFS

are fiduciaries of, the pooled employer plan 1

are bonded in accordance with section 412. 2

‘‘(B) AUDITS, EXAMINATIONS AND INVES-3

TIGATIONS.—The Secretary may perform au-4

dits, examinations, and investigations of pooled 5

plan providers as may be necessary to enforce 6

and carry out the purposes of this paragraph 7

and paragraph (43). 8

‘‘(C) GUIDANCE.—The Secretary shall 9

issue such guidance as the Secretary determines 10

appropriate to carry out this paragraph and 11

paragraph (43), including guidance— 12

‘‘(i) to identify the administrative du-13

ties and other actions required to be per-14

formed by a pooled plan provider under ei-15

ther such paragraph; and 16

‘‘(ii) which requires in appropriate 17

cases that if an employer in the plan fails 18

to take the actions required under sub-19

paragraph (A)(i)(II)— 20

‘‘(I) the assets of the plan attrib-21

utable to employees of such employer 22

(or beneficiaries of such employees) 23

are transferred to a plan maintained 24

only by such employer (or its suc-25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

19

HR 6757 RFS

cessor), to an eligible retirement plan 1

as defined in section 402(c)(8)(B) of 2

the Internal Revenue Code of 1986 3

for each individual whose account is 4

transferred, or to any other arrange-5

ment that the Secretary determines is 6

appropriate in such guidance; and 7

‘‘(II) such employer (and not the 8

plan with respect to which the failure 9

occurred or any other employer in 10

such plan) shall, except to the extent 11

provided in such guidance, be liable 12

for any liabilities with respect to such 13

plan attributable to employees of such 14

employer (or beneficiaries of such em-15

ployees). 16

The Secretary shall take into account under 17

clause (ii) whether the failure of an employer or 18

pooled plan provider to provide any disclosures 19

or other information, or to take any other ac-20

tion, necessary to administer a plan or to allow 21

a plan to meet requirements described in sub-22

paragraph (A)(i)(II) has continued over a pe-23

riod of time that demonstrates a lack of com-24

mitment to compliance. The Secretary may 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

20

HR 6757 RFS

waive the requirements of subclause (ii)(I) in 1

appropriate circumstances if the Secretary de-2

termines it is in the best interests of the em-3

ployees of the employer referred to in such 4

clause (and the beneficiaries of such employees) 5

to retain the assets in the plan with respect to 6

which the employer’s failure occurred. 7

‘‘(D) AGGREGATION RULES.—For purposes 8

of this paragraph, in determining whether a 9

person meets the requirements of this para-10

graph to be a pooled plan provider with respect 11

to any plan, all persons who perform services 12

for the plan and who are treated as a single 13

employer under subsection (b), (c), (m), or (o) 14

of section 414 of the Internal Revenue Code of 15

1986 shall be treated as one person.’’. 16

(2) BONDING REQUIREMENTS FOR POOLED EM-17

PLOYER PLANS.—The last sentence of section 412(a) 18

of the Employee Retirement Income Security Act of 19

1974 (29 U.S.C. 1112(a)) is amended by inserting 20

‘‘or in the case of a pooled employer plan (as defined 21

in section 3(43))’’ after ‘‘section 407(d)(1))’’. 22

(3) CONFORMING AND TECHNICAL AMEND-23

MENTS.—Section 3 of the Employee Retirement In-24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

21

HR 6757 RFS

come Security Act of 1974 (29 U.S.C. 1002) is 1

amended— 2

(A) in paragraph (16)(B)— 3

(i) by striking ‘‘or’’ at the end of 4

clause (ii); and 5

(ii) by striking the period at the end 6

and inserting ‘‘, or (iv) in the case of a 7

pooled employer plan, the pooled plan pro-8

vider.’’; and 9

(B) by striking the second paragraph (41). 10

(d) POOLED EMPLOYER AND MULTIPLE EMPLOYER 11

PLAN REPORTING.— 12

(1) ADDITIONAL INFORMATION.—Section 103 13

of the Employee Retirement Income Security Act of 14

1974 (29 U.S.C. 1023) is amended— 15

(A) in subsection (a)(1)(B), by striking 16

‘‘applicable subsections (d), (e), and (f)’’ and 17

inserting ‘‘applicable subsections (d), (e), (f), 18

and (g)’’; and 19

(B) by amending subsection (g) to read as 20

follows: 21

‘‘(g) ADDITIONAL INFORMATION WITH RESPECT TO 22

POOLED EMPLOYER AND MULTIPLE EMPLOYER 23

PLANS.—An annual report under this section for a plan 24

year shall include— 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

22

HR 6757 RFS

‘‘(1) with respect to any plan to which section 1

210(a) applies (including a pooled employer plan), a 2

list of employers in the plan, a good faith estimate 3

of the percentage of total contributions made by 4

such employers during the plan year, and the aggre-5

gate account balances attributable to each employer 6

in the plan (determined as the sum of the account 7

balances of the employees of such employer (and the 8

beneficiaries of such employees)); and 9

‘‘(2) with respect to a pooled employer plan, the 10

identifying information for the person designated 11

under the terms of the plan as the pooled plan pro-12

vider.’’. 13

(2) SIMPLIFIED ANNUAL REPORTS.—Section 14

104(a) of the Employee Retirement Income Security 15

Act of 1974 (29 U.S.C. 1024(a)) is amended by 16

striking paragraph (2)(A) and inserting the fol-17

lowing: 18

‘‘(2)(A) With respect to annual reports required 19

to be filed with the Secretary under this part, the 20

Secretary may by regulation prescribe simplified an-21

nual reports for any pension plan that— 22

‘‘(i) covers fewer than 100 participants; or 23

‘‘(ii) is a plan described in section 210(a) 24

that covers fewer than 1,000 participants, but 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

23

HR 6757 RFS

only if no single employer in the plan has 100 1

or more participants covered by the plan.’’. 2

(e) EFFECTIVE DATE.— 3

(1) IN GENERAL.—The amendments made by 4

this section shall apply to plan years beginning after 5

December 31, 2019. 6

(2) RULE OF CONSTRUCTION.—Nothing in the 7

amendments made by subsection (a) shall be con-8

strued as limiting the authority of the Secretary of 9

the Treasury or the Secretary’s delegate (determined 10

without regard to such amendments) to provide for 11

the proper treatment of a failure to meet any re-12

quirement applicable under the Internal Revenue 13

Code of 1986 with respect to one employer (and its 14

employees) in a multiple employer plan. 15

SEC. 102. RULES RELATING TO ELECTION OF SAFE HARBOR 16

401(k) STATUS. 17

(a) LIMITATION OF ANNUAL SAFE HARBOR NOTICE 18

TO MATCHING CONTRIBUTION PLANS.— 19

(1) IN GENERAL.—Section 401(k)(12)(A) of the 20

Internal Revenue Code of 1986 is amended by strik-21

ing ‘‘if such arrangement’’ and all that follows and 22

inserting ‘‘if such arrangement— 23


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

24

HR 6757 RFS

‘‘(i) meets the contribution require-1

ments of subparagraph (B) and the notice 2

requirements of subparagraph (D), or 3

‘‘(ii) meets the contribution require-4

ments of subparagraph (C).’’. 5

(2) AUTOMATIC CONTRIBUTION ARRANGE-6

MENTS.—Section 401(k)(13)(B) of such Code is 7

amended by striking ‘‘means’’ and all that follows 8

and inserting ‘‘means a cash or deferred arrange-9

ment— 10

‘‘(i) which is described in subpara-11

graph (D)(i)(I) and meets the applicable 12

requirements of subparagraphs (C) 13

through (E), or 14

‘‘(ii) which is described in subpara-15

graph (D)(i)(II) and meets the applicable 16

requirements of subparagraphs (C) and 17

(D).’’. 18

(b) NONELECTIVE CONTRIBUTIONS.—Section 19

401(k)(12) of such Code is amended by redesignating sub-20

paragraph (F) as subparagraph (G), and by inserting 21

after subparagraph (E) the following new subparagraph: 22

‘‘(F) TIMING OF PLAN AMENDMENT FOR 23

EMPLOYER MAKING NONELECTIVE CONTRIBU-24

TIONS.— 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

25

HR 6757 RFS

‘‘(i) IN GENERAL.—Except as pro-1

vided in clause (ii), a plan may be amend-2

ed after the beginning of a plan year to 3

provide that the requirements of subpara-4

graph (C) shall apply to the arrangement 5

for the plan year, but only if the amend-6

ment is adopted— 7

‘‘(I) at any time before the 30th 8

day before the close of the plan year, 9

or 10

‘‘(II) at any time before the last 11

day under paragraph (8)(A) for dis-12

tributing excess contributions for the 13

plan year. 14

‘‘(ii) EXCEPTION WHERE PLAN PRO-15

VIDED FOR MATCHING CONTRIBUTIONS.— 16

Clause (i) shall not apply to any plan year 17

if the plan provided at any time during the 18

plan year that the requirements of sub-19

paragraph (B) or paragraph (13)(D)(i)(I) 20

applied to the plan year. 21

‘‘(iii) 4-PERCENT CONTRIBUTION RE-22

QUIREMENT.—Clause (i)(II) shall not 23

apply to an arrangement unless the 24

amount of the contributions described in 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

26

HR 6757 RFS

subparagraph (C) which the employer is 1

required to make under the arrangement 2

for the plan year with respect to any em-3

ployee is an amount equal to at least 4 4

percent of the employee’s compensation.’’. 5

(c) AUTOMATIC CONTRIBUTION ARRANGEMENTS.— 6

Section 401(k)(13) of such Code is amended by adding 7

at the end the following: 8

‘‘(F) TIMING OF PLAN AMENDMENT FOR 9

EMPLOYER MAKING NONELECTIVE CONTRIBU-10

TIONS.— 11

‘‘(i) IN GENERAL.—Except as pro-12

vided in clause (ii), a plan may be amend-13

ed after the beginning of a plan year to 14

provide that the requirements of subpara-15

graph (D)(i)(II) shall apply to the arrange-16

ment for the plan year, but only if the 17

amendment is adopted— 18

‘‘(I) at any time before the 30th 19

day before the close of the plan year, 20

or 21

‘‘(II) at any time before the last 22

day under paragraph (8)(A) for dis-23

tributing excess contributions for the 24

plan year. 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

27

HR 6757 RFS

‘‘(ii) EXCEPTION WHERE PLAN PRO-1

VIDED FOR MATCHING CONTRIBUTIONS.— 2

Clause (i) shall not apply to any plan year 3

if the plan provided at any time during the 4

plan year that the requirements of sub-5

paragraph (D)(i)(I) or paragraph (12)(B) 6

applied to the plan year. 7

‘‘(iii) 4-PERCENT CONTRIBUTION RE-8

QUIREMENT.—Clause (i)(II) shall not 9

apply to an arrangement unless the 10

amount of the contributions described in 11

subparagraph (D)(i)(II) which the em-12

ployer is required to make under the ar-13

rangement for the plan year with respect 14

to any employee is an amount equal to at 15

least 4 percent of the employee’s com-16

pensation.’’. 17

(d) EFFECTIVE DATE.—The amendments made by 18

this section shall apply to plan years beginning after De-19

cember 31, 2018. 20

SEC. 103. CERTAIN TAXABLE NON-TUITION FELLOWSHIP 21

AND STIPEND PAYMENTS TREATED AS COM-22

PENSATION FOR IRA PURPOSES. 23

(a) IN GENERAL.—Section 219(f)(1) of the Internal 24

Revenue Code of 1986 is amended by adding at the end 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

28

HR 6757 RFS

the following: ‘‘The term ‘compensation’ shall include any 1

amount included in gross income and paid to an individual 2

to aid the individual in the pursuit of graduate or 3

postdoctoral study.’’. 4

(b) EFFECTIVE DATE.—The amendment made by 5

this section shall apply to taxable years beginning after 6


SEC. 104. REPEAL OF MAXIMUM AGE FOR TRADITIONAL IRA 8

CONTRIBUTIONS. 9

(a) IN GENERAL.—Section 219(d) of the Internal 10

Revenue Code of 1986 is amended by striking paragraph 11

(1). 12

(b) CONFORMING AMENDMENT.—Section 408A(c) of 13

the Internal Revenue Code of 1986 is amended by striking 14

paragraph (4) and by redesignating paragraphs (5), (6), 15

and (7) as paragraphs (4), (5), and (6), respectively. 16

(c) EFFECTIVE DATE.—The amendments made by 17

this section shall apply to contributions made for taxable 18

years beginning after December 31, 2018. 19

SEC. 105. QUALIFIED EMPLOYER PLANS PROHIBITED FROM 20

MAKING LOANS THROUGH CREDIT CARDS 21

AND OTHER SIMILAR ARRANGEMENTS. 22

(a) IN GENERAL.—Section 72(p)(2) of the Internal 23

Revenue Code of 1986 is amended by redesignating sub-24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

29

HR 6757 RFS

paragraph (D) as subparagraph (E) and by inserting after 1

subparagraph (C) the following new subparagraph: 2

‘‘(D) PROHIBITION OF LOANS THROUGH 3

CREDIT CARDS AND OTHER SIMILAR ARRANGE-4

MENTS.—Notwithstanding subparagraph (A), 5

paragraph (1) shall apply to any loan which is 6

made through the use of any credit card or any 7

other similar arrangement.’’. 8

(b) EFFECTIVE DATE.—The amendments made by 9

subsection (a) shall apply to loans made after the date 10

of the enactment of this Act. 11

SEC. 106. PORTABILITY OF LIFETIME INCOME INVEST-12

MENTS. 13

(a) IN GENERAL.—Section 401(a) of the Internal 14

Revenue Code of 1986 is amended by inserting after para-15

graph (37) the following new paragraph: 16

‘‘(38) PORTABILITY OF LIFETIME INCOME IN-17

VESTMENTS.— 18

‘‘(A) IN GENERAL.—Except as may be oth-19

erwise provided by regulations, a trust forming 20

part of a defined contribution plan shall not be 21

treated as failing to constitute a qualified trust 22

under this section solely by reason of allowing— 23

‘‘(i) qualified distributions of a life-24

time income investment, or 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

30

HR 6757 RFS

‘‘(ii) distributions of a lifetime income 1

investment in the form of a qualified plan 2

distribution annuity contract, 3

on or after the date that is 90 days prior to the 4

date on which such lifetime income investment 5

is no longer authorized to be held as an invest-6

ment option under the plan. 7

‘‘(B) DEFINITIONS.—For purposes of this 8

subsection— 9

‘‘(i) the term ‘qualified distribution’ 10

means a direct trustee-to-trustee transfer 11

described in paragraph (31)(A) to an eligi-12

ble retirement plan (as defined in section 13

402(c)(8)(B)), 14

‘‘(ii) the term ‘lifetime income invest-15

ment’ means an investment option which is 16

designed to provide an employee with elec-17

tion rights— 18

‘‘(I) which are not uniformly 19

available with respect to other invest-20

ment options under the plan, and 21

‘‘(II) which are to a lifetime in-22

come feature available through a con-23

tract or other arrangement offered 24

under the plan (or under another eli-25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

31

HR 6757 RFS

gible retirement plan (as so defined), 1

if paid by means of a direct trustee- 2

to-trustee transfer described in para-3

graph (31)(A) to such other eligible 4

retirement plan), 5

‘‘(iii) the term ‘lifetime income fea-6

ture’ means— 7

‘‘(I) a feature which guarantees a 8

minimum level of income annually (or 9

more frequently) for at least the re-10

mainder of the life of the employee or 11

the joint lives of the employee and the 12

employee’s designated beneficiary, or 13

‘‘(II) an annuity payable on be-14

half of the employee under which pay-15

ments are made in substantially equal 16

periodic payments (not less frequently 17

than annually) over the life of the em-18

ployee or the joint lives of the em-19

ployee and the employee’s designated 20

beneficiary, and 21

‘‘(iv) the term ‘qualified plan distribu-22

tion annuity contract’ means an annuity 23

contract purchased for a participant and 24

distributed to the participant by a plan or 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

32

HR 6757 RFS

contract described in subparagraph (B) of 1

section 402(c)(8) (without regard to 2

clauses (i) and (ii) thereof).’’. 3

(b) CASH OR DEFERRED ARRANGEMENT.— 4

(1) IN GENERAL.—Section 401(k)(2)(B)(i) of 5

such Code is amended by striking ‘‘or’’ at the end 6

of subclause (IV), by striking ‘‘and’’ at the end of 7

subclause (V) and inserting ‘‘or’’, and by adding at 8

the end the following new subclause: 9

‘‘(VI) except as may be otherwise 10

provided by regulations, with respect 11

to amounts invested in a lifetime in-12

come investment (as defined in sub-13

section (a)(38)(B)(ii)), the date that 14

is 90 days prior to the date that such 15

lifetime income investment may no 16

longer be held as an investment option 17

under the arrangement, and’’. 18

(2) DISTRIBUTION REQUIREMENT.—Section 19

401(k)(2)(B) of such Code, as amended by para-20

graph (1), is amended by striking ‘‘and’’ at the end 21

of clause (i), by striking the semicolon at the end of 22

clause (ii) and inserting ‘‘, and’’, and by adding at 23

the end the following new clause: 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

33

HR 6757 RFS

‘‘(iii) except as may be otherwise pro-1

vided by regulations, in the case of 2

amounts described in clause (i)(VI), will be 3

distributed only in the form of a qualified 4

distribution (as defined in subsection 5

(a)(38)(B)(i)) or a qualified plan distribu-6

tion annuity contract (as defined in sub-7

section (a)(38)(B)(iv)),’’. 8

(c) SECTION 403(b) PLANS.— 9

(1) ANNUITY CONTRACTS.—Section 403(b)(11) 10

of such Code is amended by striking ‘‘or’’ at the end 11

of subparagraph (B), by striking the period at the 12

end of subparagraph (C) and inserting ‘‘, or’’, and 13

by inserting after subparagraph (C) the following 14

new subparagraph: 15

‘‘(D) except as may be otherwise provided 16

by regulations, with respect to amounts invested 17

in a lifetime income investment (as defined in 18

section 401(a)(38)(B)(ii))— 19

‘‘(i) on or after the date that is 90 20

days prior to the date that such lifetime 21

income investment may no longer be held 22

as an investment option under the con-23

tract, and 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

34

HR 6757 RFS

‘‘(ii) in the form of a qualified dis-1

tribution (as defined in section 2

401(a)(38)(B)(i)) or a qualified plan dis-3

tribution annuity contract (as defined in 4

section 401(a)(38)(B)(iv)).’’. 5

(2) CUSTODIAL ACCOUNTS.—Section 6

403(b)(7)(A) of such Code is amended by striking 7

‘‘if—’’ and all that follows and inserting ‘‘if the 8

amounts are to be invested in regulated investment 9

company stock to be held in that custodial account, 10

and under the custodial account— 11

‘‘(i) no such amounts may be paid or 12

made available to any distributee (unless 13

such amount is a distribution to which sec-14

tion 72(t)(2)(G) applies) before— 15

‘‘(I) the employee dies, 16

‘‘(II) the employee attains age 17

591⁄2, 18

‘‘(III) the employee has a sever-19

ance from employment, 20

‘‘(IV) the employee becomes dis-21

abled (within the meaning of section 22

72(m)(7)), 23

‘‘(V) in the case of contributions 24

made pursuant to a salary reduction 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

35

HR 6757 RFS

agreement (within the meaning of sec-1

tion 3121(a)(5)(D)), the employee en-2

counters financial hardship, or 3

‘‘(VI) except as may be otherwise 4

provided by regulations, with respect 5

to amounts invested in a lifetime in-6

come investment (as defined in section 7

401(a)(38)(B)(ii)), the date that is 90 8

days prior to the date that such life-9

time income investment may no longer 10

be held as an investment option under 11

the contract, and 12

‘‘(ii) in the case of amounts described 13

in clause (i)(VI), such amounts will be dis-14

tributed only in the form of a qualified dis-15


401(a)(38)(B)(i)) or a qualified plan dis-17

tribution annuity contract (as defined in 18

section 401(a)(38)(B)(iv)).’’. 19

(d) ELIGIBLE DEFERRED COMPENSATION PLANS.— 20

(1) IN GENERAL.—Section 457(d)(1)(A) of 21

such Code is amended by striking ‘‘or’’ at the end 22

of clause (ii), by inserting ‘‘or’’ at the end of clause 23

(iii), and by adding after clause (iii) the following: 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

36

HR 6757 RFS

‘‘(iv) except as may be otherwise pro-1

vided by regulations, in the case of a plan 2

maintained by an employer described in 3

subsection (e)(1)(A), with respect to 4

amounts invested in a lifetime income in-5

vestment (as defined in section 6

401(a)(38)(B)(ii)), the date that is 90 7

days prior to the date that such lifetime 8

income investment may no longer be held 9

as an investment option under the plan,’’. 10

(2) DISTRIBUTION REQUIREMENT.—Section 11

457(d)(1) of such Code is amended by striking 12

‘‘and’’ at the end of subparagraph (B), by striking 13

the period at the end of subparagraph (C) and in-14

serting ‘‘, and’’, and by inserting after subparagraph 15

(C) the following new subparagraph: 16

‘‘(D) except as may be otherwise provided 17

by regulations, in the case of amounts described 18

in subparagraph (A)(iv), such amounts will be 19

distributed only in the form of a qualified dis-20


401(a)(38)(B)(i)) or a qualified plan distribu-22

tion annuity contract (as defined in section 23

401(a)(38)(B)(iv)).’’. 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

37

HR 6757 RFS

(e) EFFECTIVE DATE.—The amendments made by 1


cember 31, 2018. 3

SEC. 107. TREATMENT OF CUSTODIAL ACCOUNTS ON TER-4

MINATION OF SECTION 403(b) PLANS. 5

(a) IN GENERAL.—Section 403(b)(7) of the Internal 6


the following: 8

‘‘(D) TREATMENT OF CUSTODIAL AC-9

COUNT UPON PLAN TERMINATION.— 10

‘‘(i) IN GENERAL.—If— 11

‘‘(I) an employer terminates the 12

plan under which amounts are con-13

tributed to a custodial account under 14

subparagraph (A), and 15

‘‘(II) the person holding the as-16

sets of the account has demonstrated 17

to the satisfaction of the Secretary 18

under section 408(a)(2) that the per-19

son is qualified to be a trustee of an 20

individual retirement plan, 21

then, as of the date of the termination, the 22

custodial account shall be deemed to be an 23

individual retirement plan for purposes of 24

this title. 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

38

HR 6757 RFS

‘‘(ii) TREATMENT AS ROTH IRA.—Any 1

custodial account treated as an individual 2

retirement plan under clause (i) shall be 3

treated as a Roth IRA only if the custodial 4

account was a designated Roth account.’’. 5


this section shall apply to plan terminations occurring 7

after December 31, 2018. 8

SEC. 108. CLARIFICATION OF RETIREMENT INCOME AC-9

COUNT RULES RELATING TO CHURCH-CON-10

TROLLED ORGANIZATIONS. 11

(a) IN GENERAL.—Section 403(b)(9)(B) of the Inter-12

nal Revenue Code of 1986 is amended by inserting ‘‘(in-13

cluding an employee described in section 414(e)(3)(B))’’ 14

after ‘‘employee described in paragraph (1)’’. 15



cember 31, 2008. 18

SEC. 109. EXEMPTION FROM REQUIRED MINIMUM DIS-19

TRIBUTION RULES FOR INDIVIDUALS WITH 20

CERTAIN ACCOUNT BALANCES. 21

(a) IN GENERAL.—Section 401(a)(9) of the Internal 22


the following new subparagraph: 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

39

HR 6757 RFS

‘‘(H) EXCEPTION FROM REQUIRED MIN-1

IMUM DISTRIBUTIONS DURING LIFE OF EM-2

PLOYEE WHERE ASSETS DO NOT EXCEED 3

$50,000.— 4

‘‘(i) IN GENERAL.—If on the last day 5

of any calendar year the aggregate value of 6

an employee’s entire interest under all ap-7

plicable eligible retirement plans does not 8

exceed $50,000, then the requirements of 9

subparagraph (A) with respect to any dis-10

tribution relating to such year shall not 11

apply with respect to such employee. 12

‘‘(ii) APPLICABLE ELIGIBLE RETIRE-13

MENT PLAN.—For purposes of this sub-14

paragraph, the term ‘applicable eligible re-15

tirement plan’ means an eligible retirement 16

plan (as defined in section 402(c)(8)(B)) 17

other than a defined benefit plan. 18

‘‘(iii) LIMIT ON REQUIRED MINIMUM 19

DISTRIBUTION.—The required minimum 20

distribution determined under subpara-21

graph (A) for an employee under all appli-22

cable eligible retirement plans shall not ex-23

ceed an amount equal to the excess of— 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

40

HR 6757 RFS

‘‘(I) the aggregate value of an 1

employee’s entire interest under such 2

plans on the last day of the calendar 3

year to which such distribution re-4

lates, over 5

‘‘(II) the dollar amount in effect 6

under clause (i) for such calendar 7

year. 8

The Secretary in regulations or other guid-9

ance may provide how such amount shall 10

be distributed in the case of an individual 11

with more than one applicable eligible re-12

tirement plan. 13

‘‘(iv) INFLATION ADJUSTMENT.—In 14

the case of any calendar year beginning 15

after 2019, the $50,000 amount in clause 16

(i) shall be increased by an amount equal 17

to— 18

‘‘(I) such dollar amount, multi-19

plied by 20

‘‘(II) the cost of living adjust-21

ment determined under section 1(f)(3) 22

for the calendar year, determined by 23

substituting ‘calendar year 2018’ for 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

41

HR 6757 RFS

‘calendar year 2016’ in subparagraph 1

(A)(ii) thereof. 2

Any increase determined under this clause 3

shall be rounded to the next lowest mul-4

tiple of $5,000. 5

‘‘(v) PLAN ADMINISTRATOR RELIANCE 6

ON EMPLOYEE CERTIFICATION.—An appli-7

cable eligible retirement plan described in 8

clause (iii), (iv), (v), or (vi) of section 9

402(c)(8)(B) shall not be treated as failing 10

to meet the requirements of this paragraph 11

in the case of any failure to make a re-12

quired minimum distribution for a cal-13

endar year if— 14

‘‘(I) the aggregate value of an 15

employee’s entire interest under all 16

applicable eligible retirement plans of 17

the employer on the last day of the 18

calendar year to which such distribu-19

tion relates does not exceed the dollar 20

amount in effect for such year under 21

clause (i), and 22

‘‘(II) the employee certifies that 23

the aggregate value of the employee’s 24

entire interest under all applicable eli-25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

42

HR 6757 RFS

gible retirement plans on the last day 1

of the calendar year to which such 2

distribution relates did not exceed the 3

dollar amount in effect for such year 4

under clause (i). 5

‘‘(vi) AGGREGATION RULE.—All em-6

ployers treated as a single employer under 7

subsection (b), (c), (m), or (o) of section 8

414 shall be treated as a single employer 9

for purposes of clause (v).’’. 10

(b) PLAN ADMINISTRATOR REPORTING.—Section 11

6047 of such Code is amended by redesignating subsection 12

(h) as subsection (i) and by inserting after subsection (g) 13

the following new subsection: 14

‘‘(h) ACCOUNT BALANCE FOR PARTICIPANTS WHO 15

HAVE ATTAINED AGE 69.— 16

‘‘(1) IN GENERAL.—Not later than January 31 17

of each year, the plan administrator (as defined in 18

section 414(g)) of each applicable eligible retirement 19

plan (as defined in section 401(a)(9)(H)) shall make 20

a return to the Secretary with respect to each par-21

ticipant of such plan who has attained age 69 as of 22

the end of the preceding calendar year which 23

states— 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

43

HR 6757 RFS

‘‘(A) the name and plan number of the 1

plan, 2

‘‘(B) the name and address of the plan ad-3

ministrator, 4

‘‘(C) the name, address, and taxpayer 5

identification number of the participant, and 6

‘‘(D) the account balance of such partici-7

pant as of the end of the preceding calendar 8

year. 9

‘‘(2) STATEMENT FURNISHED TO PARTICI-10

PANT.—Every person required to make a return 11

under paragraph (1) with respect to a participant 12

shall furnish a copy of such return to such partici-13

pant. 14

‘‘(3) APPLICATION TO INDIVIDUAL RETIREMENT 15

PLANS AND ANNUITIES.—In the case of an applica-16

ble eligible retirement plan described in clause (i) or 17

(ii) of section 402(c)(8)(B)— 18

‘‘(A) any reference in this subsection to 19

the plan administrator shall be treated as a ref-20

erence to the trustee or issuer, as the case may 21

be, and 22

‘‘(B) any reference in this subsection to 23

the participant shall be treated as a reference 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

44

HR 6757 RFS

to the individual for whom such account or an-1

nuity is maintained.’’. 2

(c) EFFECTIVE DATE.—The amendments made by 3

this section shall apply to distributions required to be 4

made in calendar years beginning more than 120 days 5

after the date of the enactment of this Act. 6

SEC. 110. CLARIFICATION OF TREATMENT OF CERTAIN RE-7

TIREMENT PLAN CONTRIBUTIONS PICKED UP 8

BY GOVERNMENTAL EMPLOYERS FOR NEW 9

OR EXISTING EMPLOYEES. 10

(a) IN GENERAL.—Section 414(h)(2) of the Internal 11

Revenue Code of 1986 is amended— 12

(1) by striking ‘‘For purposes of paragraph 13

(1)’’ and inserting the following: 14

‘‘(A) IN GENERAL.—For purposes of para-15

graph (1)’’, and 16

(2) by adding at the end the following new sub-17

paragraph: 18

‘‘(B) TREATMENT OF ELECTIONS BE-19

TWEEN ALTERNATIVE BENEFIT FORMULAS.— 20

For purposes of subparagraph (A), a contribu-21

tion shall not fail to be treated as picked up by 22

an employing unit merely because the employee 23

may make an irrevocable election between the 24

application of two alternative benefit formulas 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

45

HR 6757 RFS

involving the same or different levels of em-1

ployee contributions.’’. 2


this section shall apply to plan years beginning after the 4

date of the enactment of this Act. 5

SEC. 111. ELECTIVE DEFERRALS BY MEMBERS OF THE 6

READY RESERVE OF A RESERVE COMPONENT 7

OF THE ARMED FORCES. 8

(a) IN GENERAL.—Section 402(g) of the Internal 9


the following new paragraph: 11

‘‘(9) ELECTIVE DEFERRALS BY MEMBERS OF 12

READY RESERVE.— 13

‘‘(A) IN GENERAL.—In the case of a quali-14

fied ready reservist for any taxable year, the 15

limitations of subparagraphs (A) and (C) of 16

paragraph (1) shall be applied separately with 17

respect to— 18

‘‘(i) elective deferrals of such qualified 19

ready reservist with respect to compensa-20

tion described in subparagraph (B), and 21

‘‘(ii) all other elective deferrals of 22

such qualified ready reservist. 23

‘‘(B) QUALIFIED READY RESERVIST.—For 24

purposes of this paragraph, the term ‘qualified 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

46

HR 6757 RFS

ready reservist’ means any individual for any 1

taxable year if such individual received com-2

pensation for service as a member of the Ready 3

Reserve of a reserve component (as defined in 4

section 101 of title 37, United States Code) 5

during such taxable year.’’. 6



cember 31, 2018. 9

TITLE II—ADMINISTRATIVE 10

IMPROVEMENTS 11

SEC. 201. PLAN ADOPTED BY FILING DUE DATE FOR YEAR 12

MAY BE TREATED AS IN EFFECT AS OF CLOSE 13

OF YEAR. 14

(a) IN GENERAL.—Section 401(b) of the Internal 15

Revenue Code of 1986 is amended— 16

(1) by striking ‘‘RETROACTIVE CHANGES IN 17

PLAN.—A stock bonus’’ and inserting ‘‘PLAN 18

AMENDMENTS.— 19

‘‘(1) CERTAIN RETROACTIVE CHANGES IN 20

PLAN.—A stock bonus’’, and 21

(2) by adding at the end the following new 22

paragraph: 23

‘‘(2) ADOPTION OF PLAN.—If an employer 24

adopts a stock bonus, pension, profit-sharing, or an-25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

47

HR 6757 RFS

nuity plan after the close of a taxable year but be-1

fore the time prescribed by law for filing the employ-2

er’s return of tax for the taxable year (including ex-3

tensions thereof), the employer may elect to treat 4

the plan as having been adopted as of the last day 5

of the taxable year.’’. 6


this section shall apply to plans adopted for taxable years 8

beginning after December 31, 2018. 9

SEC. 202. MODIFICATION OF NONDISCRIMINATION RULES 10

TO PROTECT OLDER, LONGER SERVICE PAR-11

TICIPANTS. 12

(a) IN GENERAL.—Section 401 of the Internal Rev-13

enue Code of 1986 is amended— 14

(1) by redesignating subsection (o) as sub-15

section (p), and 16

(2) by inserting after subsection (n) the fol-17

lowing new subsection: 18

‘‘(o) SPECIAL RULES FOR APPLYING NON-19

DISCRIMINATION RULES TO PROTECT OLDER, LONGER 20

SERVICE AND GRANDFATHERED PARTICIPANTS.— 21

‘‘(1) TESTING OF DEFINED BENEFIT PLANS 22

WITH CLOSED CLASSES OF PARTICIPANTS.— 23

‘‘(A) BENEFITS, RIGHTS, OR FEATURES 24

PROVIDED TO CLOSED CLASSES.—A defined 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

48

HR 6757 RFS

benefit plan which provides benefits, rights, or 1

features to a closed class of participants shall 2

not fail to satisfy the requirements of sub-3

section (a)(4) by reason of the composition of 4

such closed class or the benefits, rights, or fea-5

tures provided to such closed class, if— 6

‘‘(i) for the plan year as of which the 7

class closes and the 2 succeeding plan 8

years, such benefits, rights, and features 9

satisfy the requirements of subsection 10

(a)(4) (without regard to this subpara-11

graph but taking into account the rules of 12

subparagraph (I)), 13

‘‘(ii) after the date as of which the 14

class was closed, any plan amendment 15

which modifies the closed class or the ben-16

efits, rights, and features provided to such 17

closed class does not discriminate signifi-18

cantly in favor of highly compensated em-19

ployees, and 20

‘‘(iii) the class was closed before April 21

5, 2017, or the plan is described in sub-22

paragraph (C). 23


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

49

HR 6757 RFS

‘‘(B) AGGREGATE TESTING WITH DEFINED 1

CONTRIBUTION PLANS PERMITTED ON A BENE-2

FITS BASIS.— 3

‘‘(i) IN GENERAL.—For purposes of 4

determining compliance with subsection 5

(a)(4) and section 410(b), a defined benefit 6

plan described in clause (iii) may be aggre-7

gated and tested on a benefits basis with 8

1 or more defined contribution plans, in-9

cluding with the portion of 1 or more de-10

fined contribution plans which— 11

‘‘(I) provides matching contribu-12

tions (as defined in subsection 13

(m)(4)(A)), 14

‘‘(II) provides annuity contracts 15

described in section 403(b) which are 16

purchased with matching contribu-17

tions or nonelective contributions, or 18

‘‘(III) consists of an employee 19

stock ownership plan (within the 20

meaning of section 4975(e)(7)) or a 21

tax credit employee stock ownership 22

plan (within the meaning of section 23

409(a)). 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

50

HR 6757 RFS

‘‘(ii) SPECIAL RULES FOR MATCHING 1

CONTRIBUTIONS.—For purposes of clause 2

(i), if a defined benefit plan is aggregated 3

with a portion of a defined contribution 4

plan providing matching contributions— 5

‘‘(I) such defined benefit plan 6

must also be aggregated with any por-7

tion of such defined contribution plan 8

which provides elective deferrals de-9

scribed in subparagraph (A) or (C) of 10

section 402(g)(3), and 11

‘‘(II) such matching contribu-12

tions shall be treated in the same 13

manner as nonelective contributions, 14

including for purposes of applying the 15

rules of subsection (l). 16

‘‘(iii) PLANS DESCRIBED.—A defined 17

benefit plan is described in this clause if— 18

‘‘(I) the plan provides benefits to 19

a closed class of participants, 20

‘‘(II) for the plan year as of 21

which the class closes and the 2 suc-22

ceeding plan years, the plan satisfies 23

the requirements of section 410(b) 24

and subsection (a)(4) (without regard 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

51

HR 6757 RFS

to this subparagraph but taking into 1

account the rules of subparagraph 2

(I)), 3

‘‘(III) after the date as of which 4

the class was closed, any plan amend-5

ment which modifies the closed class 6

or the benefits provided to such closed 7

class does not discriminate signifi-8

cantly in favor of highly compensated 9

employees, and 10

‘‘(IV) the class was closed before 11

April 5, 2017, or the plan is described 12

in subparagraph (C). 13

‘‘(C) PLANS DESCRIBED.—A plan is de-14

scribed in this subparagraph if, taking into ac-15

count any predecessor plan— 16

‘‘(i) such plan has been in effect for 17

at least 5 years as of the date the class is 18

closed, and 19

‘‘(ii) during the 5-year period pre-20

ceding the date the class is closed, there 21

has not been a substantial increase in the 22

coverage or value of the benefits, rights, or 23

features described in subparagraph (A) or 24

in the coverage or benefits under the plan 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

52

HR 6757 RFS

described in subparagraph (B)(iii) (which-1

ever is applicable). 2

‘‘(D) DETERMINATION OF SUBSTANTIAL 3

INCREASE FOR BENEFITS, RIGHTS, AND FEA-4

TURES.—In applying subparagraph (C)(ii) for 5

purposes of subparagraph (A)(iii), a plan shall 6

be treated as having had a substantial increase 7

in coverage or value of the benefits, rights, or 8

features described in subparagraph (A) during 9

the applicable 5-year period only if, during such 10

period— 11

‘‘(i) the number of participants cov-12

ered by such benefits, rights, or features 13

on the date such period ends is more than 14

50 percent greater than the number of 15

such participants on the first day of the 16

plan year in which such period began, or 17

‘‘(ii) such benefits, rights, and fea-18

tures have been modified by 1 or more 19

plan amendments in such a way that, as of 20

the date the class is closed, the value of 21

such benefits, rights, and features to the 22

closed class as a whole is substantially 23

greater than the value as of the first day 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

53

HR 6757 RFS

of such 5-year period, solely as a result of 1

such amendments. 2

‘‘(E) DETERMINATION OF SUBSTANTIAL 3

INCREASE FOR AGGREGATE TESTING ON BENE-4

FITS BASIS.—In applying subparagraph (C)(ii) 5

for purposes of subparagraph (B)(iii)(IV), a 6

plan shall be treated as having had a substan-7

tial increase in coverage or benefits during the 8

applicable 5-year period only if, during such pe-9

riod— 10

‘‘(i) the number of participants bene-11

fitting under the plan on the date such pe-12

riod ends is more than 50 percent greater 13

than the number of such participants on 14

the first day of the plan year in which such 15

period began, or 16

‘‘(ii) the average benefit provided to 17

such participants on the date such period 18

ends is more than 50 percent greater than 19

the average benefit provided on the first 20

day of the plan year in which such period 21

began. 22

‘‘(F) CERTAIN EMPLOYEES DIS-23

REGARDED.—For purposes of subparagraphs 24

(D) and (E), any increase in coverage or value 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

54

HR 6757 RFS

or in coverage or benefits, whichever is applica-1

ble, which is attributable to such coverage and 2

value or coverage and benefits provided to em-3

ployees— 4

‘‘(i) who became participants as a re-5

sult of a merger, acquisition, or similar 6

event which occurred during the 7-year pe-7

riod preceding the date the class is closed, 8

or 9

‘‘(ii) who became participants by rea-10

son of a merger of the plan with another 11

plan which had been in effect for at least 12

5 years as of the date of the merger, 13

shall be disregarded, except that clause (ii) 14

shall apply for purposes of subparagraph (D) 15

only if, under the merger, the benefits, rights, 16

or features under 1 plan are conformed to the 17

benefits, rights, or features of the other plan 18

prospectively. 19

‘‘(G) RULES RELATING TO AVERAGE BEN-20

EFIT.—For purposes of subparagraph (E)— 21

‘‘(i) the average benefit provided to 22

participants under the plan will be treated 23

as having remained the same between the 24

2 dates described in subparagraph (E)(ii) 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

55

HR 6757 RFS

if the benefit formula applicable to such 1

participants has not changed between such 2

dates, and 3

‘‘(ii) if the benefit formula applicable 4

to 1 or more participants under the plan 5

has changed between such 2 dates, then 6

the average benefit under the plan shall be 7

considered to have increased by more than 8

50 percent only if— 9

‘‘(I) the total amount determined 10

under section 430(b)(1)(A)(i) for all 11

participants benefitting under the 12

plan for the plan year in which the 5- 13

year period described in subparagraph 14

(E) ends, exceeds 15

‘‘(II) the total amount deter-16

mined under section 430(b)(1)(A)(i) 17

for all such participants for such plan 18

year, by using the benefit formula in 19

effect for each such participant for 20

the first plan year in such 5-year pe-21

riod, by more than 50 percent. 22

In the case of a CSEC plan (as defined in 23

section 414(y)), the normal cost of the 24

plan (as determined under section 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

56

HR 6757 RFS

433(j)(1)(B)) shall be used in lieu of the 1

amount determined under section 2

430(b)(1)(A)(i). 3

‘‘(H) TREATMENT AS SINGLE PLAN.—For 4

purposes of subparagraphs (E) and (G), a plan 5

described in section 413(c) shall be treated as 6

a single plan rather than as separate plans 7

maintained by each employer in the plan. 8

‘‘(I) SPECIAL RULES.—For purposes of 9

subparagraphs (A)(i) and (B)(iii)(II), the fol-10

lowing rules shall apply: 11

‘‘(i) In applying section 410(b)(6)(C), 12

the closing of the class of participants shall 13

not be treated as a significant change in 14

coverage under section 410(b)(6)(C)(i)(II). 15

‘‘(ii) 2 or more plans shall not fail to 16

be eligible to be aggregated and treated as 17

a single plan solely by reason of having dif-18

ferent plan years. 19

‘‘(iii) Changes in the employee popu-20

lation shall be disregarded to the extent at-21

tributable to individuals who become em-22

ployees or cease to be employees, after the 23

date the class is closed, by reason of a 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

57

HR 6757 RFS

merger, acquisition, divestiture, or similar 1

event. 2

‘‘(iv) Aggregation and all other testing 3

methodologies otherwise applicable under 4

subsection (a)(4) and section 410(b) may 5

be taken into account. 6

The rule of clause (ii) shall also apply for pur-7

poses of determining whether plans to which 8

subparagraph (B)(i) applies may be aggregated 9

and treated as 1 plan for purposes of deter-10

mining whether such plans meet the require-11

ments of subsection (a)(4) and section 410(b). 12

‘‘(J) SPUN-OFF PLANS.—For purposes of 13

this paragraph, if a portion of a defined benefit 14

plan described in subparagraph (A) or (B)(iii) 15

is spun off to another employer and the spun- 16

off plan continues to satisfy the requirements 17

of— 18

‘‘(i) subparagraph (A)(i) or 19

(B)(iii)(II), whichever is applicable, if the 20

original plan was still within the 3-year pe-21

riod described in such subparagraph at the 22

time of the spin off, and 23

‘‘(ii) subparagraph (A)(ii) or 24

(B)(iii)(III), whichever is applicable, 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

58

HR 6757 RFS

the treatment under subparagraph (A) or (B) 1

of the spun-off plan shall continue with respect 2

to such other employer. 3

‘‘(2) TESTING OF DEFINED CONTRIBUTION 4

PLANS.— 5

‘‘(A) TESTING ON A BENEFITS BASIS.—A 6

defined contribution plan shall be permitted to 7

be tested on a benefits basis if— 8

‘‘(i) such defined contribution plan 9

provides make-whole contributions to a 10

closed class of participants whose accruals 11

under a defined benefit plan have been re-12

duced or eliminated, 13

‘‘(ii) for the plan year of the defined 14

contribution plan as of which the class eli-15

gible to receive such make-whole contribu-16

tions closes and the 2 succeeding plan 17

years, such closed class of participants sat-18

isfies the requirements of section 19

410(b)(2)(A)(i) (determined by applying 20

the rules of paragraph (1)(I)), 21

‘‘(iii) after the date as of which the 22

class was closed, any plan amendment to 23

the defined contribution plan which modi-24

fies the closed class or the allocations, ben-25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

59

HR 6757 RFS

efits, rights, and features provided to such 1

closed class does not discriminate signifi-2

cantly in favor of highly compensated em-3

ployees, and 4

‘‘(iv) the class was closed before April 5

5, 2017, or the defined benefit plan under 6

clause (i) is described in paragraph (1)(C) 7

(as applied for purposes of paragraph 8

(1)(B)(iii)(IV)). 9

‘‘(B) AGGREGATION WITH PLANS INCLUD-10

ING MATCHING CONTRIBUTIONS.— 11

‘‘(i) IN GENERAL.—With respect to 1 12

or more defined contribution plans de-13

scribed in subparagraph (A), for purposes 14

of determining compliance with subsection 15

(a)(4) and section 410(b), the portion of 16

such plans which provides make-whole con-17

tributions or other nonelective contribu-18

tions may be aggregated and tested on a 19

benefits basis with the portion of 1 or 20

more other defined contribution plans 21

which— 22

‘‘(I) provides matching contribu-23

tions (as defined in subsection 24

(m)(4)(A)), 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

60

HR 6757 RFS

‘‘(II) provides annuity contracts 1

described in section 403(b) which are 2

purchased with matching contribu-3

tions or nonelective contributions, or 4

‘‘(III) consists of an employee 5

stock ownership plan (within the 6

meaning of section 4975(e)(7)) or a 7

tax credit employee stock ownership 8

plan (within the meaning of section 9

409(a)). 10

‘‘(ii) SPECIAL RULES FOR MATCHING 11

CONTRIBUTIONS.—Rules similar to the 12

rules of paragraph (1)(B)(ii) shall apply 13

for purposes of clause (i). 14

‘‘(C) SPECIAL RULES FOR TESTING DE-15

FINED CONTRIBUTION PLAN FEATURES PRO-16

VIDING MATCHING CONTRIBUTIONS TO CERTAIN 17

OLDER, LONGER SERVICE PARTICIPANTS.—In 18

the case of a defined contribution plan which 19

provides benefits, rights, or features to a closed 20

class of participants whose accruals under a de-21

fined benefit plan have been reduced or elimi-22

nated, the plan shall not fail to satisfy the re-23

quirements of subsection (a)(4) solely by reason 24

of the composition of the closed class or the 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

61

HR 6757 RFS

benefits, rights, or features provided to such 1

closed class if the defined contribution plan and 2

defined benefit plan otherwise meet the require-3

ments of subparagraph (A) but for the fact that 4

the make-whole contributions under the defined 5

contribution plan are made in whole or in part 6

through matching contributions. 7

‘‘(D) SPUN-OFF PLANS.—For purposes of 8

this paragraph, if a portion of a defined con-9

tribution plan described in subparagraph (A) or 10

(C) is spun off to another employer, the treat-11

ment under subparagraph (A) or (C) of the 12

spun-off plan shall continue with respect to the 13

other employer if such plan continues to comply 14

with the requirements of clauses (ii) (if the 15

original plan was still within the 3-year period 16

described in such clause at the time of the spin 17

off) and (iii) of subparagraph (A), as deter-18

mined for purposes of subparagraph (A) or (C), 19

whichever is applicable. 20

‘‘(3) DEFINITIONS.—For purposes of this sub-21

section— 22

‘‘(A) MAKE-WHOLE CONTRIBUTIONS.—Ex-23

cept as otherwise provided in paragraph (2)(C), 24

the term ‘make-whole contributions’ means non-25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

62

HR 6757 RFS

elective allocations for each employee in the 1

class which are reasonably calculated, in a con-2

sistent manner, to replace some or all of the re-3

tirement benefits which the employee would 4

have received under the defined benefit plan 5

and any other plan or qualified cash or deferred 6

arrangement under subsection (k)(2) if no 7

change had been made to such defined benefit 8

plan and such other plan or arrangement. For 9

purposes of the preceding sentence, consistency 10

shall not be required with respect to employees 11

who were subject to different benefit formulas 12

under the defined benefit plan. 13

‘‘(B) REFERENCES TO CLOSED CLASS OF 14

PARTICIPANTS.—References to a closed class of 15

participants and similar references to a closed 16

class shall include arrangements under which 1 17

or more classes of participants are closed, ex-18

cept that 1 or more classes of participants 19

closed on different dates shall not be aggre-20

gated for purposes of determining the date any 21

such class was closed. 22

‘‘(C) HIGHLY COMPENSATED EMPLOYEE.— 23

The term ‘highly compensated employee’ has 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

63

HR 6757 RFS

the meaning given such term in section 1

414(q).’’. 2

(b) PARTICIPATION REQUIREMENTS.—Section 3

401(a)(26) of such Code is amended by adding at the end 4


‘‘(I) PROTECTED PARTICIPANTS.— 6

‘‘(i) IN GENERAL.—A plan shall be 7

deemed to satisfy the requirements of sub-8

paragraph (A) if— 9

‘‘(I) the plan is amended— 10

‘‘(aa) to cease all benefit ac-11

cruals, or 12

‘‘(bb) to provide future ben-13

efit accruals only to a closed 14

class of participants, 15

‘‘(II) the plan satisfies subpara-16

graph (A) (without regard to this sub-17

paragraph) as of the effective date of 18

the amendment, and 19

‘‘(III) the amendment was adopt-20

ed before April 5, 2017, or the plan is 21

described in clause (ii). 22

‘‘(ii) PLANS DESCRIBED.—A plan is 23

described in this clause if the plan would 24

be described in subsection (o)(1)(C), as ap-25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

64

HR 6757 RFS

plied for purposes of subsection 1

(o)(1)(B)(iii)(IV) and by treating the effec-2

tive date of the amendment as the date the 3

class was closed for purposes of subsection 4

(o)(1)(C). 5

‘‘(iii) SPECIAL RULES.—For purposes 6

of clause (i)(II), in applying section 7

410(b)(6)(C), the amendments described in 8

clause (i) shall not be treated as a signifi-9

cant change in coverage under section 10

410(b)(6)(C)(i)(II). 11

‘‘(iv) SPUN-OFF PLANS.—For pur-12

poses of this subparagraph, if a portion of 13

a plan described in clause (i) is spun off to 14

another employer, the treatment under 15

clause (i) of the spun-off plan shall con-16

tinue with respect to the other employer.’’. 17

(c) EFFECTIVE DATE.— 18

(1) IN GENERAL.—Except as provided in para-19

graph (2), the amendments made by this section 20

shall take effect on the date of the enactment of this 21

Act, without regard to whether any plan modifica-22

tions referred to in such amendments are adopted or 23

effective before, on, or after such date of enactment. 24

(2) SPECIAL RULES.— 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

65

HR 6757 RFS

(A) ELECTION OF EARLIER APPLICA-1

TION.—At the election of the plan sponsor, the 2

amendments made by this section shall apply to 3

plan years beginning after December 31, 2013. 4

(B) CLOSED CLASSES OF PARTICIPANTS.— 5

For purposes of paragraphs (1)(A)(iii), 6

(1)(B)(iii)(IV), and (2)(A)(iv) of section 401(o) 7

of the Internal Revenue Code of 1986 (as added 8

by this section), a closed class of participants 9

shall be treated as being closed before April 5, 10

2017, if the plan sponsor’s intention to create 11

such closed class is reflected in formal written 12

documents and communicated to participants 13

before such date. 14

(C) CERTAIN POST-ENACTMENT PLAN 15

AMENDMENTS.—A plan shall not be treated as 16

failing to be eligible for the application of sec-17

tion 401(o)(1)(A), 401(o)(1)(B)(iii), or 18

401(a)(26) of such Code (as added by this sec-19

tion) to such plan solely because in the case 20

of— 21

(i) such section 401(o)(1)(A), the plan 22

was amended before the date of the enact-23

ment of this Act to eliminate 1 or more 24

benefits, rights, or features, and is further 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

66

HR 6757 RFS

amended after such date of enactment to 1

provide such previously eliminated benefits, 2

rights, or features to a closed class of par-3

ticipants, or 4

(ii) such section 401(o)(1)(B)(iii) or 5

section 401(a)(26), the plan was amended 6

before the date of the enactment of this 7

Act to cease all benefit accruals, and is 8

further amended after such date of enact-9

ment to provide benefit accruals to a closed 10

class of participants. Any such section 11

shall only apply if the plan otherwise meets 12

the requirements of such section and in ap-13

plying such section, the date the class of 14

participants is closed shall be the effective 15

date of the later amendment. 16

SEC. 203. FIDUCIARY SAFE HARBOR FOR SELECTION OF 17

LIFETIME INCOME PROVIDER. 18

Section 404 of the Employee Retirement Income Se-19

curity Act of 1974 (29 U.S.C. 1104) is amended by adding 20

at the end the following: 21

‘‘(e) SAFE HARBOR FOR ANNUITY SELECTION.— 22

‘‘(1) IN GENERAL.—With respect to the selec-23

tion of an insurer for a guaranteed retirement in-24

come contract, the requirements of subsection 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

67

HR 6757 RFS

(a)(1)(B) will be deemed to be satisfied if a fidu-1

ciary— 2

‘‘(A) engages in an objective, thorough, 3

and analytical search for the purpose of identi-4

fying insurers from which to purchase such con-5

tracts; 6

‘‘(B) with respect to each insurer identified 7

under subparagraph (A)— 8

‘‘(i) considers the financial capability 9

of such insurer to satisfy its obligations 10

under the guaranteed retirement income 11

contract; and 12

‘‘(ii) considers the cost (including fees 13

and commissions) of the guaranteed retire-14

ment income contract offered by the in-15

surer in relation to the benefits and prod-16

uct features of the contract and adminis-17

trative services to be provided under such 18

contract; and 19

‘‘(C) on the basis of such consideration, 20

concludes that— 21

‘‘(i) at the time of the selection, the 22

insurer is financially capable of satisfying 23

its obligations under the guaranteed retire-24

ment income contract; and 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

68

HR 6757 RFS

‘‘(ii) the relative cost of the selected 1

guaranteed retirement income contract as 2

described in subparagraph (B)(ii) is rea-3

sonable. 4

‘‘(2) FINANCIAL CAPABILITY OF THE IN-5

SURER.—A fiduciary will be deemed to satisfy the 6

requirements of paragraphs (1)(B)(i) and (1)(C)(i) 7

if— 8

‘‘(A) the fiduciary obtains written rep-9

resentations from the insurer that— 10

‘‘(i) the insurer is licensed to offer 11

guaranteed retirement income contracts; 12

‘‘(ii) the insurer, at the time of selec-13

tion and for each of the immediately pre-14

ceding 7 plan years— 15

‘‘(I) operates under a certificate 16

of authority from the insurance com-17

missioner of its domiciliary State 18

which has not been revoked or sus-19

pended; 20

‘‘(II) has filed audited financial 21

statements in accordance with the 22

laws of its domiciliary State under ap-23

plicable statutory accounting prin-24

ciples; 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

69

HR 6757 RFS

‘‘(III) maintains (and has main-1

tained) reserves which satisfies all the 2

statutory requirements of all States 3

where the insurer does business; and 4

‘‘(IV) is not operating under an 5

order of supervision, rehabilitation, or 6

liquidation; 7

‘‘(iii) the insurer undergoes, at least 8

every 5 years, a financial examination 9

(within the meaning of the law of its domi-10

ciliary State) by the insurance commis-11

sioner of the domiciliary State (or rep-12

resentative, designee, or other party ap-13

proved by such commissioner); and 14

‘‘(iv) the insurer will notify the fidu-15

ciary of any change in circumstances oc-16

curring after the provision of the represen-17

tations in clauses (i), (ii), and (iii) which 18

would preclude the insurer from making 19

such representations at the time of 20

issuance of the guaranteed retirement in-21

come contract; and 22

‘‘(B) after receiving such representations 23

and as of the time of selection, the fiduciary 24

has not received any notice described in sub-25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

70

HR 6757 RFS

paragraph (A)(iv) and is in possession of no 1

other information which would cause the fidu-2

ciary to question the representations provided. 3

‘‘(3) NO REQUIREMENT TO SELECT LOWEST 4

COST.—Nothing in this subsection shall be construed 5

to require a fiduciary to select the lowest cost con-6

tract. A fiduciary may consider the value of a con-7

tract, including features and benefits of the contract 8

and attributes of the insurer (including, without lim-9

itation, the insurer’s financial strength) in conjunc-10

tion with the cost of the contract. 11

‘‘(4) TIME OF SELECTION.— 12

‘‘(A) IN GENERAL.—For purposes of this 13

subsection, the time of selection is— 14

‘‘(i) the time that the insurer and the 15

contract are selected for distribution of 16

benefits to a specific participant or bene-17

ficiary; or 18

‘‘(ii) if the fiduciary periodically re-19

views the continuing appropriateness of the 20

conclusion described in paragraph (1)(C) 21

with respect to a selected insurer, taking 22

into account the considerations described 23

in such paragraph, the time that the in-24

surer and the contract are selected to pro-25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

71

HR 6757 RFS

vide benefits at future dates to participants 1

or beneficiaries under the plan. 2

Nothing in the preceding sentence shall be con-3

strued to require the fiduciary to review the ap-4

propriateness of a selection after the purchase 5

of a contract for a participant or beneficiary. 6

‘‘(B) PERIODIC REVIEW.—A fiduciary will 7

be deemed to have conducted the periodic re-8

view described in subparagraph (A)(ii) if the fi-9

duciary obtains the written representations de-10

scribed in clauses (i), (ii), and (iii) of paragraph 11

(2)(A) from the insurer on an annual basis, un-12

less the fiduciary receives any notice described 13

in paragraph (2)(A)(iv) or otherwise becomes 14

aware of facts that would cause the fiduciary to 15

question such representations. 16

‘‘(5) LIMITED LIABILITY.—A fiduciary which 17

satisfies the requirements of this subsection shall not 18

be liable following the distribution of any benefit, or 19

the investment by or on behalf of a participant or 20

beneficiary pursuant to the selected guaranteed re-21

tirement income contract, for any losses that may 22

result to the participant or beneficiary due to an in-23

surer’s inability to satisfy its financial obligations 24

under the terms of such contract. 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

72

HR 6757 RFS

‘‘(6) DEFINITIONS.—For purposes of this sub-1

section— 2

‘‘(A) INSURER.—The term ‘insurer’ means 3

an insurance company, insurance service, or in-4

surance organization, including affiliates of 5

such companies. 6

‘‘(B) GUARANTEED RETIREMENT INCOME 7

CONTRACT.—The term ‘guaranteed retirement 8

income contract’ means an annuity contract for 9

a fixed term or a contract (or provision or fea-10

ture thereof) which provides guaranteed bene-11

fits annually (or more frequently) for at least 12

the remainder of the life of the participant or 13

the joint lives of the participant and the partici-14

pant’s designated beneficiary as part of an indi-15

vidual account plan.’’. 16

TITLE III—OTHER SAVINGS 17

PROVISIONS 18

SEC. 301. UNIVERSAL SAVINGS ACCOUNTS. 19

(a) IN GENERAL.—Subchapter F of chapter 1 of the 20

Internal Revenue Code of 1986 is amended by adding at 21

the end the following new part: 22

‘‘PART IX—UNIVERSAL SAVINGS ACCOUNTS 23

‘‘Sec. 530U. Universal Savings Accounts.


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

73

HR 6757 RFS

‘‘SEC. 530U. UNIVERSAL SAVINGS ACCOUNTS. 1

‘‘(a) GENERAL RULE.—A Universal Savings Account 2

shall be exempt from taxation under this subtitle. Not-3

withstanding the preceding sentence, such account shall 4

be subject to the taxes imposed by section 511 (relating 5

to imposition of tax on unrelated business income of chari-6

table organizations). 7

‘‘(b) UNIVERSAL SAVINGS ACCOUNT.—For purposes 8

of this section, the term ‘Universal Savings Account’ 9

means a trust created or organized in the United States 10

by an individual for the exclusive benefit of such individual 11

and which is designated (in such manner as the Secretary 12

may prescribe) at the time of the establishment of the 13

trust as a Universal Savings Account, but only if the writ-14

ten governing instrument creating the trust meets the fol-15

lowing requirements: 16

‘‘(1) Except in the case of a qualified rollover 17

contribution described in subsection (d)— 18

‘‘(A) no contribution will be accepted un-19

less it is in cash, and 20

‘‘(B) contributions will not be accepted for 21

the taxable year in excess of the contribution 22

limit specified in subsection (c)(2). 23

‘‘(2) No distribution will be made unless it is— 24

‘‘(A) cash, or 25

‘‘(B) property that— 26


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

74

HR 6757 RFS

‘‘(i) has a readily ascertainable fair 1

market value, and 2

‘‘(ii) is identified by the Secretary in 3

regulations or other guidance as property 4

to which this subparagraph applies. 5

‘‘(3) The trustee is a bank (as defined in sec-6

tion 408(n)) or another person who demonstrates to 7

the satisfaction of the Secretary that the manner in 8

which that person will administer the trust will be 9

consistent with the requirements of this section. 10

‘‘(4) No part of the trust assets will be invested 11

in life insurance contracts or collectibles (as defined 12

in section 408(m)). 13

‘‘(5) The interest of an individual in the bal-14

ance of his account is nonforfeitable. 15

‘‘(6) The assets of the trust shall not be com-16

mingled with other property except in a common 17

trust fund or common investment fund. 18

‘‘(c) TREATMENT OF DISTRIBUTIONS AND CON-19

TRIBUTIONS.— 20

‘‘(1) DISTRIBUTIONS.— 21

‘‘(A) IN GENERAL.—Except as provided in 22

subparagraph (B), any distribution from a Uni-23

versal Savings Account shall not be includible in 24

gross income. 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

75

HR 6757 RFS

‘‘(B) NET INCOME ATTRIBUTABLE TO EX-1

CESS CONTRIBUTIONS.—Any distribution of net 2

income described in section 4973(i)(2) shall be 3

includible in the gross income of the account 4

holder in the taxable year in which the con-5

tribution to which such net income relates was 6

made. 7

‘‘(2) CONTRIBUTION LIMIT.— 8

‘‘(A) IN GENERAL.—The aggregate 9

amount of contributions (other than qualified 10

rollover contributions described in subsection 11

(d)) for any taxable year to all Universal Sav-12

ings Accounts maintained for the benefit of an 13

individual shall not exceed the lesser of— 14

‘‘(i) $2,500, or 15

‘‘(ii) an amount equal to the com-16

pensation (within the meaning of section 17

219) includible in such individual’s gross 18

income for such taxable year. 19

‘‘(B) NO CONTRIBUTIONS FOR DEPEND-20

ENTS.—In the case of an individual who is a 21

dependent of another taxpayer for a taxable 22

year beginning in the calendar year in which 23

such individual’s taxable year begins, the dollar 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

76

HR 6757 RFS

amount under subparagraph (A) for such indi-1

vidual’s taxable year shall be zero. 2

‘‘(C) SPECIAL RULE IN CASE OF JOINT RE-3

TURN.— 4

‘‘(i) IN GENERAL.—In the case of an 5

individual to whom this clause applies, the 6

amount determined under subparagraph 7

(A)(ii) with respect to such individual for 8

the taxable year shall not be less than an 9

amount equal to the sum of— 10

‘‘(I) the compensation of such in-11

dividual includible in gross income for 12

the taxable year, plus 13

‘‘(II) the compensation of such 14

individual’s spouse includible in gross 15

income for the taxable year reduced 16

(but not below zero) by the amount 17

contributed for the taxable year to all 18

Universal Savings Accounts main-19

tained for the benefit of such spouse. 20

‘‘(ii) INDIVIDUAL TO WHOM CLAUSE 21

(i) APPLIES.—Clause (i) shall apply to any 22

individual— 23

‘‘(I) who files a joint return for 24

the taxable year, and 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

77

HR 6757 RFS

‘‘(II) whose compensation includ-1

ible in gross income for the taxable 2

year is less than the compensation of 3

such individual’s spouse includible in 4

gross income for the taxable year. 5

‘‘(D) COST-OF-LIVING ADJUSTMENT.—In 6

the case of any taxable year beginning in a cal-7

endar year after 2019, the $2,500 amount 8

under subparagraph (A)(i) shall be increased by 9

an amount equal to— 10

‘‘(i) such dollar amount, multiplied by 11

‘‘(ii) the cost-of-living adjustment de-12

termined under section 1(f)(3) for the cal-13

endar year, determined by substituting 14

‘calendar year 2018’ for ‘calendar year 15

2016’ in subparagraph (A)(ii) thereof. 16

If any amount after adjustment under the pre-17

ceding sentence is not a multiple of $100, such 18

amount shall be rounded to the next lower mul-19

tiple of $100. 20

‘‘(d) QUALIFIED ROLLOVER CONTRIBUTION.—For 21

purposes of this section, the term ‘qualified rollover con-22

tribution’ means a contribution to a Universal Savings Ac-23

count from another such account of the same individual, 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

78

HR 6757 RFS

but only if such amount is contributed not later than the 1

60th day after the distribution from such other account. 2

‘‘(e) TREATMENT OF ACCOUNT UPON DEATH.— 3

Upon death of any account holder of a Universal Savings 4

Account— 5

‘‘(1) SPOUSE.—In the case of the account hold-6

er’s surviving spouse acquiring such account holder’s 7

interest in such account by reason of the death of 8

the account holder, such account shall be treated as 9

if the spouse were the account holder. 10

‘‘(2) OTHER CASES.—In any other case— 11

‘‘(A) all amounts in such account shall be 12

treated as distributed on the date of such indi-13

vidual’s death, and 14

‘‘(B) such account shall cease to be treated 15

as a Universal Savings Account. 16

‘‘(f) OTHER SPECIAL RULES.— 17

‘‘(1) COMMUNITY PROPERTY LAWS.—This sec-18

tion shall be applied without regard to any commu-19

nity property laws. 20

‘‘(2) LOSS OF TAXATION EXEMPTION OF AC-21

COUNT WHERE INDIVIDUAL ENGAGES IN PROHIB-22

ITED TRANSACTION; EFFECT OF PLEDGING ACCOUNT 23

AS SECURITY.—Rules similar to the rules of para-24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

79

HR 6757 RFS

graphs (2) and (4) of section 408(e) shall apply to 1

any Universal Savings Account. 2

‘‘(g) REPORTS.—The trustee of a Universal Savings 3

Account shall make such reports regarding such account 4

to the Secretary and to the account holder with respect 5

to contributions, distributions, and such other matters as 6

the Secretary may require. Such reports shall be— 7

‘‘(1) filed at such time and in such manner as 8

the Secretary provides, and 9

‘‘(2) furnished to account holders— 10

‘‘(A) not later than January 31 of the cal-11

endar year following the calendar year to which 12

such reports relate, and 13

‘‘(B) in such manner as the Secretary pro-14

vides.’’. 15

(b) TAX ON EXCESS CONTRIBUTIONS.— 16

(1) IN GENERAL.—Section 4973(a) of such 17

Code is amended by striking ‘‘or’’ at the end of 18

paragraph (5), by inserting ‘‘or’’ at the end of para-19

graph (6), and by inserting after paragraph (6) the 20

following new paragraph: 21

‘‘(7) a Universal Savings Account (as defined in 22

section 530U),’’. 23


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

80

HR 6757 RFS

(2) EXCESS CONTRIBUTION.—Section 4973 of 1

such Code is amended by adding at the end the fol-2

lowing new subsection: 3

‘‘(i) EXCESS CONTRIBUTIONS TO UNIVERSAL SAV-4

INGS ACCOUNTS.—For purposes of this section— 5

‘‘(1) IN GENERAL.—In the case of Universal 6

Savings Accounts (within the meaning of section 7

530U), the term ‘excess contributions’ means the 8

sum of— 9

‘‘(A) the amount (if any) by which the 10

amount contributed for the taxable year to such 11

accounts (other than qualified rollover contribu-12

tions (as defined in section 530U(d))) exceeds 13

the contribution limit under section 530U(c)(2) 14

for such taxable year, and 15

‘‘(B) the amount determined under this 16

subsection for the preceding taxable year, re-17

duced by the sum of— 18

‘‘(i) the distributions out of the ac-19

count for the taxable year, and 20

‘‘(ii) the amount (if any) by which the 21

maximum amount allowable as a contribu-22

tion under section 530U(c)(2) for the tax-23

able year exceeds the amount contributed 24

to the accounts for the taxable year. 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

81

HR 6757 RFS

‘‘(2) SPECIAL RULE.—A contribution shall not 1

be taken into account under paragraph (1) if such 2

contribution (together with the amount of net in-3

come attributable to such contribution) is distributed 4

to the account holder on or before the due date of 5

the account holder’s return of tax for such taxable 6

year.’’. 7

(c) TAX ON PROHIBITED TRANSACTIONS.—Section 8

4975(e)(1) of such Code is amended by striking ‘‘or’’ at 9

the end of subparagraph (F), by striking the period at 10

the end of subparagraph (G) and inserting ‘‘, or’’, and 11

by adding at the end the following new subparagraph: 12

‘‘(H) a Universal Savings Account (as de-13

fined in section 530U).’’. 14

(d) FAILURE TO PROVIDE REPORTS ON UNIVERSAL 15

SAVINGS ACCOUNTS.—Section 6693(a)(2) of such Code is 16

amended by striking ‘‘and’’ at the end of subparagraph 17

(E), by striking the period at the end of subparagraph 18

(F) and inserting ‘‘, and’’, and by inserting after subpara-19

graph (F) the following new subparagraph: 20

‘‘(G) section 530U(g) (relating to Uni-21

versal Savings Accounts).’’. 22

(e) CONFORMING AMENDMENT.—The table of parts 23

for subchapter F of chapter 1 of such Code is amended 24

by adding at the end the following new item: 25

‘‘PART IX. UNIVERSAL SAVINGS ACCOUNTS’’.


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

82

HR 6757 RFS

(f) EFFECTIVE DATE.—The amendments made by 1

this section shall apply to taxable years beginning after 2


SEC. 302. EXPANSION OF SECTION 529 PLANS. 4

(a) DISTRIBUTIONS FOR CERTAIN EXPENSES ASSO-5

CIATED WITH REGISTERED APPRENTICESHIP PRO-6

GRAMS.—Section 529(c) of the Internal Revenue Code of 7

1986 is amended by adding at the end the following new 8

paragraph: 9

‘‘(8) TREATMENT OF CERTAIN EXPENSES ASSO-10

CIATED WITH REGISTERED APPRENTICESHIP PRO-11

GRAMS.—Any reference in this subsection to the 12

term ‘qualified higher education expense’ shall in-13

clude a reference to expenses for fees, books, sup-14

plies, and equipment required for the participation 15

of a designated beneficiary in an apprenticeship pro-16

gram registered and certified with the Secretary of 17

Labor under section 1 of the National Apprentice-18

ship Act (29 U.S.C. 50).’’. 19

(b) DISTRIBUTIONS FOR CERTAIN HOMESCHOOLING 20

EXPENSES.—Section 529(c)(7) of such Code is amended 21

by striking ‘‘include a reference to’’ and all that follows 22

and inserting ‘‘include a reference to— 23

‘‘(A) expenses for tuition in connection 24

with enrollment or attendance of a designated 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

83

HR 6757 RFS

beneficiary at an elementary or secondary pub-1

lic, private, or religious school, and 2

‘‘(B) expenses, with respect to a des-3

ignated beneficiary, for— 4

‘‘(i) curriculum and curricular mate-5

rials, 6

‘‘(ii) books or other instructional ma-7

terials, 8

‘‘(iii) online educational materials, 9

‘‘(iv) tuition for tutoring or edu-10

cational classes outside of the home (but 11

only if the tutor or class instructor is not 12

related (within the meaning of section 13

152(d)(2)) to the student), 14

‘‘(v) dual enrollment in an institution 15

of higher education, and 16

‘‘(vi) educational therapies for stu-17

dents with disabilities, 18

in connection with a homeschool (whether treat-19

ed as a homeschool or a private school for pur-20

poses of applicable State law).’’. 21

(c) DISTRIBUTIONS FOR QUALIFIED EDUCATION 22

LOAN REPAYMENTS.— 23


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

84

HR 6757 RFS

(1) IN GENERAL.—Section 529(c) of such Code, 1

as amended by subsection (a), is amended by adding 2

at the end the following new paragraph: 3

‘‘(9) TREATMENT OF QUALIFIED EDUCATION 4

LOAN REPAYMENTS.— 5

‘‘(A) IN GENERAL.—Any reference in this 6

subsection to the term ‘qualified higher edu-7

cation expense’ shall include a reference to 8

amounts paid as principal or interest on any 9

qualified education loan (as defined in section 10

221(d)) of the designated beneficiary or a sib-11

ling of the designated beneficiary. 12

‘‘(B) LIMITATION.—The amount of dis-13

tributions treated as a qualified higher edu-14

cation expense under this paragraph with re-15

spect to the loans of any individual shall not ex-16

ceed $10,000 (reduced by the amount of dis-17

tributions so treated for all prior taxable years). 18

‘‘(C) SPECIAL RULES FOR SIBLINGS OF 19

THE DESIGNATED BENEFICIARY.— 20

‘‘(i) SEPARATE ACCOUNTING.—For 21

purposes of subparagraph (B) and sub-22

section (d), amounts treated as a qualified 23

higher education expense with respect to 24

the loans of a sibling of the designated 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

85

HR 6757 RFS

beneficiary shall be taken into account 1

with respect to such sibling and not with 2

respect to such designated beneficiary. 3

‘‘(ii) SIBLING DEFINED.—For pur-4

poses of this paragraph, the term ‘sibling’ 5

means an individual who bears a relation-6

ship to the designated beneficiary which is 7

described in section 152(d)(2)(B).’’. 8

(2) COORDINATION WITH DEDUCTION FOR STU-9

DENT LOAN INTEREST.—Section 221(e)(1) of such 10

Code is amended by adding at the end the following: 11

‘‘The deduction otherwise allowable under subsection 12

(a) (prior to the application of subsection (b)) to the 13

taxpayer for any taxable year shall be reduced (but 14

not below zero) by so much of the distributions 15

treated as a qualified higher education expense 16

under section 529(c)(9) with respect to loans of the 17

taxpayer as would be includible in gross income 18

under section 529(c)(3)(A) for such taxable year but 19

for such treatment.’’. 20

(d) DISTRIBUTIONS FOR CERTAIN ELEMENTARY AND 21

SECONDARY SCHOOL EXPENSES IN ADDITION TO TUI-22

TION.—Section 529(c)(7)(A), as amended by subsection 23

(b), is amended to read as follows: 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

86

HR 6757 RFS

‘‘(A) expenses described in section 1

530(b)(3)(A)(i) in connection with enrollment 2

or attendance of a designated beneficiary at an 3

elementary or secondary public, private, or reli-4

gious school, and’’. 5

(e) UNBORN CHILDREN ALLOWED AS ACCOUNT 6

BENEFICIARIES.—Section 529(e) is amended by adding at 7

the end the following new paragraph: 8

‘‘(6) TREATMENT OF UNBORN CHILDREN.— 9

‘‘(A) IN GENERAL.—Nothing shall prevent 10

an unborn child from being treated as a des-11

ignated beneficiary or an individual under this 12

section. 13

‘‘(B) UNBORN CHILD.—For purposes of 14

this paragraph— 15

‘‘(i) IN GENERAL.—The term ‘unborn 16

child’ means a child in utero. 17

‘‘(ii) CHILD IN UTERO.—The term 18

‘child in utero’ means a member of the 19

species homo sapiens, at any stage of de-20

velopment, who is carried in the womb.’’. 21

(f) EFFECTIVE DATES.— 22

(1) IN GENERAL.—Except as otherwise pro-23

vided in this subsection, the amendments made by 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

87

HR 6757 RFS

this section shall apply to distributions made after 1


(2) UNBORN CHILDREN ALLOWED AS ACCOUNT 3

BENEFICIARIES.—The amendment made by sub-4

section (e) shall apply to contributions made after 5


SEC. 303. PENALTY-FREE WITHDRAWALS FROM RETIRE-7

MENT PLANS FOR INDIVIDUALS IN CASE OF 8

BIRTH OF CHILD OR ADOPTION. 9

(a) IN GENERAL.—Section 72(t)(2) of the Internal 10



‘‘(H) DISTRIBUTIONS FROM RETIREMENT 13

PLANS IN CASE OF BIRTH OF CHILD OR ADOP-14

TION.— 15

‘‘(i) IN GENERAL.—Any qualified 16

birth or adoption distribution. 17

‘‘(ii) LIMITATION.—The aggregate 18

amount which may be treated as qualified 19

birth or adoption distributions by any indi-20

vidual with respect to any birth or adop-21

tion shall not exceed $7,500. 22

‘‘(iii) QUALIFIED BIRTH OR ADOPTION 23

DISTRIBUTION.—For purposes of this sub-24

paragraph— 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

88

HR 6757 RFS

‘‘(I) IN GENERAL.—The term 1

‘qualified birth or adoption distribu-2

tion’ means any distribution from an 3

applicable eligible retirement plan to 4

an individual if made during the 1- 5

year period beginning on the date on 6

which a child of the individual is born 7

or on which the legal adoption by the 8

individual of an eligible child is final-9

ized. 10

‘‘(II) ELIGIBLE CHILD.—The 11

term ‘eligible child’ means any indi-12

vidual (other than a child of the tax-13

payer’s spouse) who has not attained 14

age 18 or is physically or mentally in-15

capable of self-support. 16

‘‘(iv) TREATMENT OF PLAN DISTRIBU-17

TIONS.— 18

‘‘(I) IN GENERAL.—If a distribu-19

tion to an individual would (without 20

regard to clause (ii)) be a qualified 21

birth or adoption distribution, a plan 22

shall not be treated as failing to meet 23

any requirement of this title merely 24

because the plan treats the distribu-25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

89

HR 6757 RFS

tion as a qualified birth or adoption 1

distribution, unless the aggregate 2

amount of such distributions from all 3

plans maintained by the employer 4

(and any member of any controlled 5

group which includes the employer) to 6

such individual exceeds $7,500. 7

‘‘(II) CONTROLLED GROUP.—For 8

purposes of subclause (I), the term 9

‘controlled group’ means any group 10

treated as a single employer under 11

subsection (b), (c), (m), or (o) of sec-12

tion 414. 13

‘‘(v) AMOUNT DISTRIBUTED MAY BE 14

REPAID.— 15

‘‘(I) IN GENERAL.—Any indi-16

vidual who receives a qualified birth 17

or adoption distribution may make 18

one or more contributions in an ag-19

gregate amount not to exceed the 20

amount of such distribution to an ap-21

plicable eligible retirement plan of 22

which such individual is a beneficiary 23

and to which a rollover contribution of 24

such distribution could be made under 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

90

HR 6757 RFS

section 402(c), 403(a)(4), 403(b)(8), 1

408(d)(3), or 457(e)(16), as the case 2

may be. 3

‘‘(II) LIMITATION ON CONTRIBU-4

TIONS TO APPLICABLE ELIGIBLE RE-5

TIREMENT PLANS OTHER THAN 6

IRAS.—The aggregate amount of con-7

tributions made by an individual 8

under subclause (I) to any applicable 9

eligible retirement plan which is not 10

an individual retirement plan shall not 11

exceed the aggregate amount of quali-12

fied birth or adoption distributions 13

which are made from such plan to 14

such individual. Subclause (I) shall 15

not apply to contributions to any ap-16

plicable eligible retirement plan which 17

is not an individual retirement plan 18

unless the individual is eligible to 19

make contributions (other than those 20

described in subclause (I)) to such ap-21

plicable eligible retirement plan. 22

‘‘(III) TREATMENT OF REPAY-23

MENTS OF DISTRIBUTIONS FROM AP-24

PLICABLE ELIGIBLE RETIREMENT 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

91

HR 6757 RFS

PLANS OTHER THAN IRAS.—If a con-1

tribution is made under subclause (I) 2

with respect to a qualified birth or 3

adoption distribution from an applica-4

ble eligible retirement plan other than 5

an individual retirement plan, then 6

the taxpayer shall, to the extent of the 7

amount of the contribution, be treated 8

as having received such distribution in 9

an eligible rollover distribution (as de-10

fined in section 402(c)(4)) and as 11

having transferred the amount to the 12

applicable eligible retirement plan in a 13

direct trustee to trustee transfer with-14

in 60 days of the distribution. 15

‘‘(IV) TREATMENT OF REPAY-16

MENTS FOR DISTRIBUTIONS FROM 17

IRAS.—If a contribution is made 18

under subclause (I) with respect to a 19

qualified birth or adoption distribution 20

from an individual retirement plan, 21

then, to the extent of the amount of 22

the contribution, such distribution 23

shall be treated as a distribution de-24

scribed in section 408(d)(3) and as 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

92

HR 6757 RFS

having been transferred to the appli-1

cable eligible retirement plan in a di-2

rect trustee to trustee transfer within 3

60 days of the distribution. 4

‘‘(vi) DEFINITION AND SPECIAL 5

RULES.—For purposes of this subpara-6

graph— 7

‘‘(I) APPLICABLE ELIGIBLE RE-8

TIREMENT PLAN.—The term ‘applica-9

ble eligible retirement plan’ means an 10

eligible retirement plan (as defined in 11

section 402(c)(8)(B)) other than a de-12

fined benefit plan. 13

‘‘(II) EXEMPTION OF DISTRIBU-14

TIONS FROM TRUSTEE TO TRUSTEE 15

TRANSFER AND WITHHOLDING 16

RULES.—For purposes of sections 17

401(a)(31), 402(f), and 3405, a quali-18

fied birth or adoption distribution 19

shall not be treated as an eligible roll-20

over distribution. 21

‘‘(III) TAXPAYER MUST INCLUDE 22

TIN.—A distribution shall not be 23

treated as a qualified birth or adop-24

tion distribution with respect to any 25


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

93

HR 6757 RFS

child or eligible child unless the tax-1

payer includes the name, age, and 2

TIN of such child or eligible child on 3

the taxpayer’s return of tax for the 4

taxable year. 5

‘‘(IV) DISTRIBUTIONS TREATED 6

AS MEETING PLAN DISTRIBUTION RE-7

QUIREMENTS.—Any qualified birth or 8

adoption distribution shall be treated 9

as meeting the requirements of sec-10

tions 401(k)(2)(B)(i), 11

403(b)(7)(A)(ii), 403(b)(11), and 12

457(d)(1)(A).’’. 13


this section shall apply to distributions made after Decem-15

ber 31, 2018. 16

TITLE IV—BUDGETARY EFFECTS 17

SEC. 401. BUDGETARY EFFECTS. 18

(a) STATUTORY PAYGO SCORECARDS.—The budg-19

etary effects of this Act shall not be entered on either 20

PAYGO scorecard maintained pursuant to section 4(d) of 21

the Statutory Pay-As-You-Go Act of 2010. 22

(b) SENATE PAYGO SCORECARDS.—The budgetary 23

effects of this Act shall not be entered on any PAYGO 24


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

94

HR 6757 RFS

scorecard maintained for purposes of section 4106 of H. 1

Con. Res. 71 (115th Congress). 2

Passed the House of Representatives September 27,

2018.

Attest: KAREN L. HAAS,

Clerk.


penc

er o

n D

SK

BB

XC

HB

2PR

OD

with

BIL

LS

TH D CONGRESS SESSION H. R. 6757 · HR 6757 RFS 1 thereof), whichever is applicable, merely because...

Documents

Transcript of TH D CONGRESS SESSION H. R. 6757 · HR 6757 RFS 1 thereof), whichever is applicable, merely because...